The business of advertising agencies has shrunk by more than 70 per cent following the spread of Covid-19 and the lockdown. In a recommendation to the government, the Advertising Agencies Association of India (AAAI), which is the national association of advertising agencies, has proposed that advertising expense be treated as an investment and the cost be amortised over the next three years.

The objective is to encourage a higher level of expenditure by profitable companies, which will in turn accelerate the revival of economic activity. In a letter to Prakash Javadekar, the Union minister of information & broadcasting, AAAI said on a Rs 100 expense, an advertiser be allowed to claim an expenditure of, say, twice that amount (Rs 200), while computing income tax.